The purpose of this post is really just to record the trade. Further discussions on GPS can be found here, here, here, here and here.

To summarize: I own 154 shares in the taxable account at a cost basis of $21.69. As long as I can get it for less than that cost basis (or maybe even a little more considering the tax-adjusted yield), I’m happy to try to use puts to transfer ownership to the beneficiary IRA.

GPS will go ex-div on 10/3/16, a few days before this trade expires. Management left the payout at $0.23/share, which was disappointing, but understandable. Even with the flat dividend payout, the company maintains its status as a dividend contender.

It would have been nice to get an expiration before the ex-div so I could get the benefit of a payout if I’m assigned, but the yield/downside offerings weren’t that attractive for the 9/30/16 expiration.

Oh well. The premium exceeds the dividend payout by about $6, and obviously has a much shorter duration than a whole quarter..

Investment

SPL (Strike Price Logic)

Strike price logic from last time justified a $21.50 price. This is a slightly lower strike with an equivalent amount of downside protection and a bit more annualized yield.